THE BREAKFAST BRIEFING

Believe it or not, the stock market is behaving exactly to plan.

Up, down, sideways, investors have seen it all so far this year. But for all the stomach-churning action in several highflying biotech and social-media stocks, the broad market remains essentially flat for the year.

That’s just what some market watchers predicted.

Wall Street strategists, typically a bullish bunch, took an uncharacteristically restrained approach heading into 2014. They worried that rising valuations and the Federal Reserve paring back its easy-money policies would cause the rally to cool significantly.

About one-third of the way through the year, they are still cautious.

Goldman Sachs, for example, raised a warning flag on valuations back in January, saying stock prices were “lofty by almost any measure.” After last year’s 30% rally, the firm expected the S&P 500 would finish the year up only 3% at 1900. Deutsche Bank, Stifel Nicolaus and Wells Fargo each predicted the index would close the year at 1850. They have all stuck with those forecasts.

The stock index closed Wednesday at 1872, up 1.3% year-to-date. It has roughly traded between 1840 and 1880 for much of the past two months.

In fact, none of the 14 Wall Street strategists tracked by Birinyi Associates have changed their S&P 500 year-end price targets from the levels they set at the beginning of the year. They estimate the S&P 500 will gain 5.1% for the year and finish at 1942.

“The market has reverted to its newfound aimless pattern,” David Zervos, chief market strategist at Jefferies & Co., wrote to clients Wednesday, “with both the bulls and the bears finding very little love in 2014.”

Much of the action, he says, has been reflective of short-term positioning by hedge funds and retail traders as opposed to long-term investors making significant moves.

“But if we dig a little deeper into the nooks and crannies of the 2014 price action, I think we see a market that is very concerned about Fed tapering,” he said. “A market that is unsure about the Fed’s ability to exit QE gracefully. And a market that is pricing in the potential for a future monetary-policy mistake.”

As long as that mindset remains intact, it’s tough to argue the market will muster much fuel to break out from the recent range.

Morning MoneyBeat Daily Factoid: On this day in 1947, the Brooklyn Dodgers purchased Jackie Robinson’s contract, setting the stage for Mr. Robinson to become the first black baseball player to play in the Major Leagues.

STOCKS TO WATCH

Family Dollar Stores is projected to post second-quarter earnings of 90 cents a share, according to a consensus survey by FactSet.

“Some of the [stock’s] recent weakness may reflect diminished hopes of a buyout, while some likely reflects ongoing concerns about the economic well-being of lower-income consumers. While the stock could see a short-term relief rally on even a small bit of good news, we need to see signs of better store-level execution before getting more constructive,” said Patrick McKeever at MKM Partners in a report. Family Dollar shares are down 9% year to date.

Rite Aid is expected to post fourth-quarter earnings of 4 cents a share. Analysts at Raymond James said quarterly results are likely to be muted based on results from peers Fred’s Inc. and Walgreen.

MUST READS (LINKS)

Fed Feared Misleading on Interest Rates: “Federal Reserve officials worried at their latest policy meeting that they might unintentionally signal that they had grown more eager to raise interest rates.”

Greece Gets Strong Demand for Bond: “Greece will Thursday raise €3 billion ($4.14 billion) from its first longer-term bond sale in four years after attracting more than €20 billion of demand, according to bankers working on the deal.”

Big Car Makers in Race to Recall: “Major car makers are accelerating recalls and directing dealers to stop sales of vehicles with potentially dangerous defects amid an aggressive safety clampdown by auto regulators and others in the U.S., Japan and China.”

EU Regulators Cast Wary Eye on Telecom Deals: “Europe’s fragmented telecommunications industry is in the midst of an unprecedented wave of consolidation as dozens of mobile and fixed-line operators seek to scale up and swallow smaller players. There is just one problem: Antitrust authorities think they are carving out the wrong kind of merger.”

Weak Chinese Trade Data Cloud Growth Hopes: “An unexpected drop in both China’s exports and imports in March threw more doubt around the country’s growth prospects, though economists said the real picture may not be as bleak as the numbers suggest.”

Bank of America Settles Card Suit: “Bank of America settled with regulators for $772 million—much of it in customer refunds—over allegations it prodded customers into signing up for extra credit-card products.”

Comcast, Time Warner Cable Defend $45 Billion Deal: “Executives from Comcast and Time Warner Cable face questions from lawmakers on how the proposed combination of the nation’s two largest cable companies would help consumers.”